BANGKOK, NNA - Toyota Motor Corp. is forecasting its sagging new vehicle sales in Thailand will bounce back in 2018 for the first increase in six years on the back of improving economic sentiment in Southeast Asia's second-largest economy.
Toyota has faced an uphill battle in the local market amid intensified competition stemming from years of market shrinkage. The anticipated resurgence of the global car giant will be a litmus test for the full recovery of the Thai automobile market, according to industry sources.
Toyota Motor Thailand Co., the local arm of Japan's largest automaker, recently projected its domestic sales of cars and commercial vehicles will top 300,000 units this year, a 24.9 percent jump from 2017, while foreseeing a 3.4 percent gain to 900,000 vehicles in the entire local market.
Thai auto sales peaked in 2012 when the government offered tax incentives to spur purchases by first-car buyers, boosting overall market sales to a record annual high of 1,436,529 vehicles. But the market size nearly halved by 2016.
In the second-largest car market in the region after Indonesia, Toyota's sales have continued to fall since 2013 after its market share plunged from a recent peak of more than 40 percent in 2010 to 27.6 percent in 2017 despite recovery in sales of major rivals last year or even earlier. The automaker expects to increase its share to 33 percent in 2018.
In 2017, the whole Thai auto market also grew 13.3 percent to an estimated 870,748 units for the first rise in five years, according to Toyota.
Toyota's local unit, still a leading Thai maker, saw a 2.0 percent drop in sales to 240,137 vehicles last year, which was less than half the 2012 peak of 516,086 units, due to sluggish sales in its mainstay commercial vehicle sector, including 1-ton pickups.
Looking back on the result last year, Michinobu Sugata, president of the local unit and managing director of the Nagoya-based firm, said at a press conference last week that 2017 was "a difficult year for Toyota" as its commercial vehicle sales sank 9.1 percent although passenger car sales grew 10.7 percent.
Meanwhile, the Thai economy has been back on a firm recovery track even under the prolonged rule of Prime Minister Prayut Chan-o-cha's military government. The annual growth rate in gross domestic product improved from 0.9 percent in 2014 to a 2 to 3 percent range by last year and is expected to top the 4 percent level this year, following the end of a yearlong mourning period for the late King Bhumibol Adulyadej.
Thailand's exports in 2017 logged a record $236.7 billion, up 9.9 percent from the previous year, according to preliminary government data.
Toyota expects to add momentum to its sales this year in Thailand by the planned launch in March of a C-HR small crossover sport utility vehicle, which gained popularity and saw strong sales in Japan last year.
Optimistic views on the Thai car market this year have also spread among other makers. Chanchai Trakarnudomsuk, president of Mazda Sales (Thailand) Co., a subsidiary of Japan's Mazda Motor Corp., said last week that the Thai auto market is expected to grow 5 percent to 920,000 vehicles in 2018.
Mazda's domestic sales have continued to grow since 2015 and jumped 21 percent last year, leading to a better projection than Toyota's on the strength of "strong exports and tourism, expansion in public investment, and recovery in the agricultural sector," he said. The company projected a 15 percent surge in its sales this year.
Isuzu Motors Ltd., a Japanese commercial vehicle manufacturer holding the second-largest share in Thailand, and third-ranked Honda Motor Co. declined to comment on the country's entire car market outlook this year. Both registered double-digit growth in 2017.
Other major competitors such as Mitsubishi Motors Corp. and Nissan Motor Co. also registered robust sales growth of more than 20 percent and 40 percent last year, respectively, far outpacing the overall market growth rate.
As for luxury cars, Mercedes-Benz of Germany, the leading maker in the segment over a decade, saw a 22.6 percent sales leap to an all-time high of 14,484 units last year and expects a further gain in 2018 due to rising consumer confidence, said Michael Grewe, president of Mercedes-Benz (Thailand) Ltd. (NNA/Kyodo)